Nervously, Osborne confronts the real world and it’s not a pretty place

Monday 17 May 2010 11:24 BST

A new Chancellor, another announcement of abrogation of duty.

Compared with Gordon Brown's news on his first day in office in 1997 that the Bank of England was to be made independent, the creation of the Office for Budget Responsibility lacks the same impact.

Indeed, the first reaction is to groan "not again" at more initials to absorb and powers to digest, so used did we become during the Labour years to a committee being set up for this, an official group looking into that.

Equally, we also learned to take government economic forecasts with a large dollop of salt — certainly towards the end when they were wrong on a regular basis.

George Osborne's initiative should go some way towards reassuring us of the latter. But this was a nervous, hesitant Osborne. It was his first public appearance since he became the youngest Chancellor in 120 years.

Perhaps his edginess was an attempt at assuming middle-aged gravitas. Or maybe, he is simply aware of the enormity of the task in front of him. That reality was illustrated by the note from the outgoing Chief Secretary to the Treasury: "I'm afraid to tell you there is no money left". It was a joke, apparently, except that nobody is laughing.

Or, as someone who is not a natural platform orator at the best of times, Osborne may not relish unscripted questions and answers.

Certainly, it wasn't the sort of bravura display we've come to expect.

Then again, he wasn't addressing a gathering of the Tory faithful. His is a different audience now and the market is no forgiving friend of a Chancellor, even one feeling his way — any slip-up and disaster beckons.

But there were enough sideways glances for support, like a tennis player stealing a quick look at a watching coach, to suggest that the previous Osborne is taking a back seat. Tackling the deficit — or as he would prefer, the shocking mess left by the previous tenant — is extremely serious, grown-up business.

He's also being forced to share with some unlikely bedfellows. In the election campaign, the Liberal Democrats proposed some sort of committee of economic oversight — and the Tories were quick to rubbish the idea.

Roll forward only a sliver of time and here is Osborne establishing something similar and with those same Liberal Democrats alongside him. On top of that, Osborne has also to calm officials in the Treasury, his new power base. A large slice of their influence has gone. It's as if by setting up the OBR, their new boss has said they can't be trusted, or that politicians can't be trusted not to take their work and give it some creative spin. Either way, the effect is to diminish still further the most self-regarding of Whitehall departments.

The role of those officials now is to identify where the savings can be made, beginning with £6 billion. In the context of £170 billion, it's a tiny amount.

They know that, Osborne knows that and it, too, may explain the sombre mood.